Shelter Six:  Fed Using All of Its Tools to Support Economic Recovery

The Fed restated its commitment to keep buying bonds last week while announcing it will keep short-term rates close to zero for at least the next two years.

Fed officials now forecast that the economy will shrink 6.5% in 2020 and then grow by 5% in 2021.

Mortgage purchase volume was up 9.3% last week over the previous week and has now increased for the 9th week in a row.

Respondents who believe that now is a good time to buy a home increased by 11% in May, according to a Fannie Mae’s Home Purchase Survey.

An important difference in the current crisis and the Great Recession is how much more equity people have in their homes this time around.

A Black Knight report indicates that 80% of borrowers in forbearance have 20% or more equity, just 9% have less than 10% equity, and only 1% are currently upside down with no equity.

Rate Update

30-year mortgage rates fell below 3% last week for the first time.  The better things go with the economy reopening, the more upward pressure will be on rates, and vice versa.

This Week

Retail Sales are due out on Tuesday and Housing Starts on Wednesday.

June 15, 2020 by · Leave a Comment

About James

James A. Williamson is currently the Sr VP of Sales Development for Shelter Lending Services (formerly Fairfield Mortgage). James joined Shelter in 1994 and was the company's top Loan Officer in GA for 20 straight years helping over 2500 families finance their homes. James now oversees an incredible group of Loan Officers in Atlanta while further building Shelter's Atlanta business.

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